Stock Analysis on Net
Stock Analysis on Net

Reynolds American Inc. (NYSE:RAI)

$22.49

This company has been moved to the archive! The financial data has not been updated since May 3, 2017.

Analysis of Inventory

Microsoft Excel

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Inventory Disclosure

Reynolds American Inc., balance sheet: inventory

US$ in millions

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Leaf tobacco
Other raw materials
Work in process
Finished products
Other
Current cost inventories
LIFO allowance
LIFO inventories

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Item Description The company
LIFO inventories Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Reynolds American Inc. lIFO inventories increased from 2014 to 2015 but then slightly decreased from 2015 to 2016.

Adjustment to Inventory: Conversion from LIFO to FIFO

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in millions

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Adjustment to LIFO Inventories
LIFO inventories at LIFO (as reported)
Add: Inventory LIFO reserve
LIFO inventories at FIFO (adjusted)
Adjustment to Current Assets
Current assets (as reported)
Add: Inventory LIFO reserve
Current assets (adjusted)
Adjustment to Total Assets
Total assets (as reported)
Add: Inventory LIFO reserve
Total assets (adjusted)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)
Add: Inventory LIFO reserve
Shareholders’ equity (adjusted)
Adjustment to Net Income
Net income (as reported)
Add: Increase (decrease) in inventory LIFO reserve
Net income (adjusted)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Reynolds American Inc. inventory value on Dec 31, 2016 would be $1,784 (in millions) if the FIFO inventory method was used instead of LIFO. Reynolds American Inc. inventories, valued on a LIFO basis, on Dec 31, 2016 were $1,645. Reynolds American Inc. inventories would have been $139 higher than reported on Dec 31, 2016 if the FIFO method had been used instead.

Reynolds American Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Reynolds American Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Current Ratio
Reported current ratio (LIFO)
Adjusted current ratio (FIFO)
Net Profit Margin
Reported net profit margin (LIFO)
Adjusted net profit margin (FIFO)
Total Asset Turnover
Reported total asset turnover (LIFO)
Adjusted total asset turnover (FIFO)
Financial Leverage
Reported financial leverage (LIFO)
Adjusted financial leverage (FIFO)
Return on Equity (ROE)
Reported ROE (LIFO)
Adjusted ROE (FIFO)
Return on Assets (ROA)
Reported ROA (LIFO)
Adjusted ROA (FIFO)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by current liabilities. Reynolds American Inc. adjusted current ratio improved from 2014 to 2015 but then deteriorated significantly from 2015 to 2016.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Reynolds American Inc. adjusted net profit margin ratio improved from 2014 to 2015 and from 2015 to 2016.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Reynolds American Inc. adjusted total asset turnover ratio deteriorated from 2014 to 2015 but then slightly improved from 2015 to 2016.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Reynolds American Inc. adjusted financial leverage ratio decreased from 2014 to 2015 and from 2015 to 2016.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Reynolds American Inc. adjusted ROE deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Reynolds American Inc. adjusted ROA deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.

Reynolds American Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Current assets
Current liabilities
Liquidity Ratio
Current ratio1
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted current assets
Current liabilities
Liquidity Ratio
Adjusted current ratio2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= ÷ =

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= ÷ =

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by current liabilities. Reynolds American Inc. adjusted current ratio improved from 2014 to 2015 but then deteriorated significantly from 2015 to 2016.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Net income
Net sales, includes excise taxes
Profitability Ratio
Net profit margin1
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income
Net sales, includes excise taxes
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Net profit margin = 100 × Net income ÷ Net sales, includes excise taxes
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales, includes excise taxes
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Reynolds American Inc. adjusted net profit margin ratio improved from 2014 to 2015 and from 2015 to 2016.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Net sales, includes excise taxes
Total assets
Activity Ratio
Total asset turnover1
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Net sales, includes excise taxes
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Total asset turnover = Net sales, includes excise taxes ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Net sales, includes excise taxes ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Reynolds American Inc. adjusted total asset turnover ratio deteriorated from 2014 to 2015 but then slightly improved from 2015 to 2016.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Total assets
Shareholders’ equity
Solvency Ratio
Financial leverage1
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted shareholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= ÷ =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Reynolds American Inc. adjusted financial leverage ratio decreased from 2014 to 2015 and from 2015 to 2016.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Net income
Shareholders’ equity
Profitability Ratio
ROE1
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted shareholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Reynolds American Inc. adjusted ROE deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Net income
Total assets
Profitability Ratio
ROA1
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Reynolds American Inc. adjusted ROA deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.